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Oh, building wealth from scratch.
You worked hard for what you have as a side hustler or self-made earner.
By bootstrapping your way to something from nothing, you’ve likely encountered plenty of financial challenges along the way.
Mix marriage into the equation and it can become even more complex.
…
But without proper planning, your income and assets could be at risk.
With 45% of Americans working a side gig it’s more important than ever for couples to plan ahead to protect what they built.
Luckily if you take the right steps and have a solid game plan, you can absolutely safeguard your financial future and build wealth with your spouse.
Let’s dig into how…
Finances For Self-Made Earners: Marriage Edition
- Self-Made Earners Face Unique Money Challenges
- Prenup Essentials for Side Hustlers
- Protecting Your Business The Smart Way
- How To Build Wealth With Your Partner
Self-Made Earners Face Unique Money Challenges
If you earn money from self-employment it’s different from a traditional job.
Irregular income.
Business assets.
Business value.
All these things play a factor when you’re working for yourself.
They can become issues when you get married, too.
Uncertain income schedules and fluctuating profits from side hustles can make financial planning stressful for you and your partner. When you don’t have a set monthly paycheck it forces you to both be more intentional with money.
Not to mention…
You’ve likely poured years of hard work and dedication into your craft. Whether that’s consulting full-time, starting a blog, or making handmade goods. When you’re bootstrapping your business, every little thing adds up.
It’s important to both you and your future spouse that you protect your investment. Luckily, there are prenuptial agreement essentials every self-made earner should know before getting married.
Why Prenups Are Trending Now
Here’s a wild fact…
There was a time not too long ago when prenups were taboo. They were “relationship killers” or thought of as unromantic.
Not anymore.
Recent research shows that 47% of millennials who have been engaged or married signed a prenup.
Yep, nearly half of one generation.
So what’s changed?
Millennials and Gen Z are handling money smarter.
They tend to get married later in life, which allows more time to build individual wealth. And if you’re self-employed, chances are you already have some type of asset or debt before you walk down the aisle.
Here are a few more stats:
- The percentage of couples who sign prenups has increased from 3% in 2010 to 15% in 2022
- 52% of women initiate the prenup discussion
- 64% say prenups are appropriate for all couples, not just the wealthy
Planning for the unknown isn’t pessimistic, it’s realistic.
Protecting Your Business The Right Way
When you’re self-employed, your business should come first.
Yes you’ve worked hard to establish your craft as a side gig. But you’ve also likely devoted a lot of time, money, and resources into your work.
It only makes sense that protecting your business is your number one priority when getting married.
Here’s why.
If you don’t take proper precautions, your business and income can be deemed marital property. Just like household furniture or a marriage car.
That means it can be split if you divorce down the line.
Ya don’t want that.
Here are some steps you can take to protect your business before saying “I do.”
- Get everything in writing. Document your businesses value, assets, and income before your wedding date
- Separate your business and personal expenses. Open a business bank account and credit cards. Never mix them together
- Valuate your business. Understand what your business is worth today
- Agree on business appreciation. Determine how you’ll split business growth if the two of you divorce in the future
Transparency is key. You and your partner should both be open about what you’re protecting.
Don’t wait for a divorce to figure it all out. Do it long before you say I do.
How To Build Wealth With Your Partner
Of course protecting your assets before marriage is crucial. But couples with self-made incomes should also have a plan to build wealth together, too.
It’s here that things get fun.
Setting financial goals as a couple is key.
Yes, you may operate your own businesses separately. But that doesn’t mean you shouldn’t have shared goals you’re both working towards. Whether that be saving for a home together, maxing out retirement accounts, or cultivating an emergency fund.
Here are a few tips to get you started.
- Open a joint checking account and create a household budget. Include both spousal incomes, making sure to calculate your self-employed income as well
- Plan for taxes. Self-employed taxes aren’t calculated the same as W-2 employee taxes
- Diversify your income. You have side hustle income experience. Use it to your advantage and find multiple sources of revenue
- Invest together. Decide how you’ll both grow your wealth
The benefit about having self-made incomes is you’re already great with money.
You know how to identify opportunities and aren’t afraid of taking risks. Apply those same principals when building wealth with your future spouse.
Open Communication Is Crucial
Couples that fight about money are destined to fail.
But when you add self-employed incomes into the mix, money conversations can be even trickier.
Maybe your partner doesn’t fully understand the ins and outs of freelance income. Or maybe they become anxious during a month when you didn’t make much money. Either way, disagreements about money are inevitable.
Until you openly communicate.
Hold monthly money meetings with your partner. Go over business profits. Celebrate each other’s successes. And troubleshoot any problems.
It’s all about teamwork when you’re handling irregular income.
Protecting your money should be a team effort, too. When you and your partner are both on the same page about your financial situation, trust will grow.
And trust is important for a healthy marriage.
When To Get Professional Help
Don’t be afraid to ask for help.
Your prenup should be reviewed by a family law attorney. Speak with an accountant who understands self-employment. And consider working with a financial planner who can help you both manage irregular income.
It’ll cost you some money up front. But professional experts can save you a lot of headaches down the road.
Think of it as an investment in you and your spouse.
Financial Planning For Self-Made Earners: Conclusion
Saving and protecting your hard earned money isn’t difficult. It just requires action.
Understand the unique challenges that self-employed or side hustlers’ incomes present. Learn how to protect what you built before marriage. And create a plan to grow wealth with your future spouse.
Let’s review:
- Document your business assets before marriage
- Consider a prenup to protect both spouses assets
- Separate business finances from personal finances
- Set financial goals with your spouse
- Communicate about money
- Don’t be afraid to ask for professional help
You’ve worked too hard building your side gig business to lose it all. Plan ahead, protect what you built, and build wealth with your spouse.
